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CIFG Overview

CIFG Overview. CIFG financial guaranty companies are rated Aaa/AAA/AAA with experienced industry professionals in each business line CIFG financial guarantors have over $680 million in claims paying resources segregated to support both present and future bondholder obligations

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CIFG Overview

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  1. CIFG Overview • CIFG financial guaranty companies are rated Aaa/AAA/AAA with experienced industry professionals in each business line • CIFG financial guarantors have over $680 million in claims paying resources segregated to support both present and future bondholder obligations • CIFG has insured over $12 billion in par since inception • Its financial guarantors are authorized in the European Union and licensed in over 40 jurisdictions. The number of US states in which CIFG is licensed should approach 50 during 2004* • CIFG is a member of an international group with a long and distinguished history in financial services *Please refer to Appendix for a listing of US jurisdictions in which CIFG NA is licensed

  2. Overview:CIFG Claims-Paying Resources • CIFG is well capitalized:US Statutory Pro Forma

  3. Business Review • CIFG’s key financials show its progress

  4. Portfolio I CIFG grows with a high quality risk portfolio December 31, 2003 $12,345 million of net par outstanding

  5. Portfolio II The risk portfolio is well diversified among business lines December 31, 2003 $12,345 million of net par outstanding

  6. Corporate Structure and Capitalization ICDC IXIS (Parent Company) • CIFG’s parent is CDC IXIS, the investment banking arm of Caisse Nationale des Caisses d’Epargne (CNCE), the central institution of the French cooperative bank network founded in 1818. CNCE is rated Aa/AA/AA • CNCE has two sets of owners: the Caisses d’Epargne savings banks (65% collectively) and Caisse des Dépôts et Consignations (CDC) (35%)* • CDC is a nearly 200-year old French financial institution with various public responsibilities for the benefit of French citizens. It is rated Aaa/AAA/AAA *Please refer to Appendix B, the CDC IXIS Letter dated June 30, 2004, for information on the July 1, 2004 transfer of activities associated with CDC

  7. Corporate Structure and Capitalization II CDC CNCE Caisses d’Epargne (34 Cooperative Banks) 35%* 65% 96.55%** CDC IXIS 100% CIFG * Via CDC Holding-Finance ** San Paolo IMI, the Italian Bank, holds a 3.45% stake in CDC IXIS

  8. Voting Trust (NY) Introduction to CIFG: Corporate Structure CIFG HoldingFrench Holding Company CDC IXIS Financial Guaranty Dedicated French Reinsurance Company REINSURANCE REINSURANCE CAPITAL SUPPORT CAPITAL SUPPORT CIFG Services Delaware Service Company 100% VOTING INTEREST 100% BENEFICIAL OWNER CIFG NA Monoline incorporated in New York CIFG Europe Monoline incorporated in France

  9. Professional Team:Business Units

  10. Professional Team:Corporate Functions

  11. US Public Finance:Corporate Strategy • Public Finance has targeted the full spectrum of public finance transactions • Initial activity was in the secondary market to take advantage of pricing and competitive dynamics and in the New York primary market where CIFG NA was first licensed • CIFG has shifted focus to new issue (negotiated and competitive) markets across the country as licenses are approved in each state

  12. US Public Finance:Representative Transactions I • Primary Market • Chicago Board of Education $300 million Series 2004 • Commonwealth of Puerto Rico $100 million Series 2004B • Commonwealth of Puerto Rico Public Finance Corporation $25 million* • Metropolitan Transit Authority Dedicated Tax Bond $100 million Series 2004B-5 • Metropolitan Transit Authority Transportation Revenue Bonds $250 million* • New York City GO $13.72 million Series 2004G • New York State Local Government $210.45 million Series 2004 • Salt Lake City Airport $62 million Series 2004A and 2004B • State of New Jersey Economic Development Authority, $100 million Series 2004 H1-H2 * Committed

  13. US Public Finance:Representative Transactions II • Secondary Market • Approximately $600 million of bonds insured • Actively quote over 40 names • Recent secondary market names include: • New York City, Port Authority of NY and NJ • Puerto Rico GO and related credits • California GO, appropriation credits and DWR • Province of Québec/Hydro Québec

  14. US Public Finance:Portfolio Distribution CIFG US Public Finance December 31, 2003 $3,136 million of Net Par Outstanding

  15. US Structured Finance:Corporate Strategy • Focus has been on low-risk transactions with sizeable premiums • Collateralized Debt Obligations (CDO), funded and synthetic, at triple-A and super triple-A attachment points • Residential Mortgage Backed Securities (RMBS) • Consumer Assets • Future Flows • Commercial Mortgage Backed Securities (CMBS) • Insured Enhanced Equipment Trust Certificates (EETC)

  16. Structured Finance:Investors, Counterparties & Placement Agents • Investors, counterparties and placement agents have included:

  17. US Structured Finance:Representative Transactions closed in 2003 • CDOs • Investment grade CDOs • Multi-sector (ABS) CDOs • Consumer Assets • Auto loans • Home equity lines of credit (HELOCs) • Rental car fleet financing • Residential Mortgage Backed Securities (RMBS) • Previously Insured Aircraft Transactions • Insured EETCs for US and European airlines • Insured aircraft lease portfolio

  18. US Structured Finance:Portfolio Distribution US Structured Finance December 31, 2003 $5,966 million of Net Par Outstanding

  19. Europe:Corporate Strategy • There are two sub-sectors for the European business • Infrastructure/Public Finance • Direct government issues • Infrastructure financing • Private Finance Initiative (PFI) • Structured Finance • Collateralized Debt Obligations (CDOs) • Asset Backed Securities (ABS) • Residential Mortgage Backed Securities (RMBS) • Commercial Mortgage Backed Securities (CMBS)

  20. Europe:Representative Transactions • CIFG Europe’s closed transactions include: • Public Finance • City of Marseille • Infrastructure Finance • Anglian Water • Prado Tunnel, Marseille • Rome Airport • Structured Finance • Leveraged loan CLOs • Multi-sector (ABS) CDOs • Italian consumer finance securitization • Residential/Commercial mortgage backed securitization

  21. Europe:Portfolio Distribution CIFG Europe December 31, 2003 $3,136 million of Net Par Outstanding

  22. Underwriting and Oversight • Risk Management is autonomous, centralized and conservative • Risk Management reports directly to CEO • Centralized credit review and approval ensures consistent application of underwriting standards • All transactions are underwritten to no-loss standard • No watch list items

  23. Reinsurance • Reinsurance helps CIFG adjust its portfolio • Facultative strategy • Reinsurance functions as a risk management tool • Reinsurers have been rated at least Double-A

  24. Rating Agency Oversight • Operating level • Continuously reviews quality of ownership, management, business plan, and procedures • Assesses financial strength including capital adequacy, liquidity, investments and all forms of “soft” capital • Evaluates CIFG at the triple-A level, i.e. the strictest standards for financial guarantors • Transaction level • Shadow rates each transaction that CIFG guarantees • Assigns a capital charge based on historical default statistics, ranges-of-loss severities, and portfolio correlation

  25. Liquidity • CIFG keeps a short-duration, top-quality investment portfolio • CIFG’s liquidity requirements are met by maintaining a short-duration investment portfolio • The investment portfolio will be adjusted to reflect expected liabilities as the insured portfolio grows and evolves

  26. Investment Portfolio Composition December 31, 2003 Average Duration: less than one year

  27. Consolidated CIFG Balance SheetU.S. GAAP – unaudited

  28. CIFG in conclusion • CIFG is an important addition to the financial guaranty industry • Triple-A by Moody’s, Standard & Poor’s and Fitch • Rigorous risk management culture • Low-risk insured portfolio • Experienced staff in all markets • Strong, committed shareholders with long, distinguished history in financial services

  29. Business Contacts

  30. Websites • Rating agency reports, financial statements and other materials are available at: • www.cifg.com • Information on other members of the group of companies is available at: • www.caissedesdepots.frClick on HTML Version/News/Group • www.groupe.caisse-epargne.frClick on NotreGroupe/SiteInstitutionnel/BritishFlag/PressRoom • www.cdcixis.comClick on EnglishVersion/Media/PressReleases

  31. Appendix A:US Licenses* *As of June 30, 2004

  32. Appendix B:CDC IXIS Letter • June 30, 2004 • Dear Sir or Dear Madam, • Following the agreement signed between Caisse des Dépôts and Caisse d’Epargne Group which provides for the two partners to build a major full-service bank together, CDC IXIS Group is set to undergo two major changes in the next few months. This letter marks our intention to keep you personally informed of the ensuing process. • The first change concerns capital ownership. On July 1, 2004, Caisse Nationale des Caisses d’Epargne (CNCE), the Caisse d’Epargne Group’s lead company, takes control of CDC IXIS in a transaction that will see the bank and its subsidiaries join one of France’s leading banking groups, offering maximum financial security, with €17 billion of consolidated shareholders’ equity (pro forma 12/31/03) and ratings of AA/Aa2/AA. Caisse des Dépôts will be the Group’s strategic partner, with a 35% equity stake in CNCE. • The second change concerns organizational structure. In the final quarter of 2004, CDC IXIS and its French and international subsidiaries will be reorganized to form Caisse d’Epargne Group’s investment banking arm, operating under the IXIS brand name. As part of this process, all of CDC IXIS’s liabilities and commitments will be allocated to the business lines concerned. Its various activities will be carried out via three subsidiaries controlled directly by CNCE: • • IXIS Corporate & Investment Bank, which will be created out of CDC IXIS Capital Markets, • • IXIS Asset Management, a financial and real-estate asset management specialist, • • IXIS Investor Services, a new institutional custody and investor services subsidiary. • Caisse des Dépôts’ guaranty in favor of CDC IXIS will be transferred in identical form to IXIS Corporate & Investment Bank. Caisse des Dépôts will continue to guarantee transactions already concluded by CDC IXIS until they are completed as well as new transactions effected by IXIS Corporate & Investment Bank up until January 23, 2007. To complement this guaranty, within the framework of Caisse d’Epargne Group’s financial solidarity mechanism, CNCE will act as guarantor for transactions that do not fall within the scope of the Caisse des Dépôts guaranty. • Our integration into a major banking group offering a diversity of business lines and services will ensure we can continue to accompany you in your development and act as partner for your financial transactions and risk & investment management needs, all in a fully secure manner. You will retain your usual contacts while at the same time having access to a broader range of banking and financial services. We are naturally keen to ensure your company personnel are kept regularly abreast of the operational implications of these changes and we will therefore shortly be sending them full documentation on the subject. Our own staff is also available to provide any additional information they might require. Rest assured that we will continue to pay the same high level of attention to maintaining quality relations and to the reliability of our transaction execution. • Yours truly, Anthony Orsatelli Laurent Vieillevigne Chairman of the Executive Board Member of the Executive Board

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